The fate of Forest Park Medical Center – Fort Worth may not be known until later this month as the bankruptcy court has approved bidding procedures for the property.
The current owners, Sabra Health Care REIT Inc., announced Sunday that the bankruptcy court has approved bidding procedures and an auction date of May 12 for the sale of FPMC Fort Worth Realty Partner LP’s real estate. FPMC is the borrower for Forest Park Medical Center – Fort Worth construction loan.
The two bidders appear to be Texas Health Resources, based in Arlington, and Methodist Health Systems, based in Dallas, which owns the Mansfield Methodist Medical Center, according to bankruptcy filings and sources familiar with the case.
According to Sabra, on April 20, 2016, FPMC and Texas Health Resources executed a purchase and sale agreement whereby, subject to bankruptcy court approval and customary closing conditions THR will purchase the hospital and medical office real estate that serve as collateral for our construction loan for $112 million. The bankruptcy court approved this THR bid as the stalking horse bid in the auction process, which basically serves as a floor for all offers.
Other bids for the auction are due by May 10. If additional bids are received, an auction will take place May 12, with a hearing scheduled for May 19 to approve the sale to the successful bidder.
As of April 22, 2016, the outstanding principal balance on the Fort Worth construction loan was $60.8 million, and $8.8 million of accrued and unpaid interest and fees remained outstanding, according to a Sabra news release.
“We are pleased with the continued progress on our Forest Park assets,” said Rick Matros, CEO and chairman of Sabra. “The outcome is happening as we have consistently said it would. Whether the stalking horse bid wins or not, we expect that the proceeds generated from the sale of the Fort Worth real estate will result in an approximately 12 percent return on our investment in the Fort Worth hospital.”
Forest Park Medical Center first opened in Dallas in 2009, then opened the Fort Worth location last year in the new Clearfork development. There were also locations in Southlake, Frisco and San Antonio. All the locations have either closed, filed for bankruptcy or have been sold. Because they were chartered separately, they all field for bankruptcy separately.
The Fort Worth location is a 54-bed acute care hospital, developed by the Neal Richards Group of Dallas.
Earlier this month, HCA North Teas completed its deal for Forest Park Medical Center – Frisco, rebranding the upscale facility as Medical City Frisco.
It will operate as a 54-bed campus of HCA’s Medical Center of Plano, with Charles Gressle, that hospital’s CEO, also leading the new Medical City Frisco. The deal for that hospital was valued at $96.25 million.
Sabra Health Care, which eventually invested $284.4 million in the hospitals, felt the high-end feel of the hospitals with natural lighting, resort décor and private rooms, would attract an upscale clientele. It did, but because they focused on private insurance patients and eschewed – at least initially – Medicare or Medicaid patients, they did not have the volume of other similar hospitals.